Outsourcing payroll has become a popular method for many mid-sized companies concerned about payroll tax deposits and reporting. However, a careful analysis of all the costs and benefits associated with the payroll cycle should convince managers to fully utilize Sage Abra payroll for great savings while giving them confidence they are complying with all governmental regulations. In this post, let's look at the cost analysis.
When preparing a cost analysis for payroll preparation, do not overlook the details. A good cost analysis should include the following:
- Software cost. When outsourcing payroll to a payroll service, the company is basically renting software. The rental cost repeats each year and may even increase over time. The purchase of payroll software eliminates this cost completely. Over time, the annual renewal and customer service fees will be substantially less than the costs for a payroll service.
- Labor cost. Do not forget the cost of payroll personnel. Whether the payroll is prepared in-house or through a service, the company employee is processing the time sheets, inputting the data, setting up the new employees, and verifying the pre-payroll reports. This cost will not change. In short, the company is already providing the labor for the payroll process. In addition, because Abra payroll is a fully integrated product, there is no labor associated with writing and entering payroll entries into the general ledger.
- Software maintenance cost. Abra payroll updates all tax tables and notifies users of changes in governmental regulations. This will ensure everyone is comfortable with taxes and compliance.
- Printing checks and reports. Preparation of checks, debit cards, direct deposits, and tax deposits are all completed within company timing along with payroll reports such as W-2s.
Part II, we'll examine the benefits of in-house payroll.
Choosing whether to outsource payroll or to keep payroll in-house is a major decision for most mid-sized companies. A well thought out cost/benefit analysis makes the process easier when considering a change to Abra payroll - now Sage HRMS. Part 1 of this topic covered the quantitative issues of cost analysis. Part 2 will focus on qualitative topics related to benefits.
The significance of qualitative matters should never be underestimated. They can be powerful deciding factors. A meaningful consideration of benefits should include the following factors.
- Control. Abra payroll offers trial payrolls, on-demand checks for terminations and retroactive pay, and the ability to make last minute changes to payroll. These conveniences take the stress out of payroll preparation. In-house payroll assures security as the sensitive employee data never leaves the care of the company. In addition, the seamless integration with the general ledger makes posting payroll effortless and confident.
- Flexibility. Customize Abra payroll in accordance with the particular needs of the company instead of adjusting to an outsourcer's software and reports. Also, employee pay choices include direct deposit, paper check, debit card, or any combination of these options. When required, implement change requests with ease.
- Employee satisfaction. Employee self-service functions are convenient for both employees and the payroll department. Employees can research their payroll history and reprint paystubs and W-2s.
- Payroll taxes and reporting. Compliance with governmental regulations is a vital part of the payroll process. Standard tax tables, governmental reports, and workers' compensation tracking will all be easier in-house with no surprises.
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